PART 4: SUMMARY OF EVIDENCE|
27. Witnesses were sharply divided both on the general
question of the desirability of Community involvement in social
policy, and in particular on the significance of the Social Policy
Agenda. One view was argued by the General Secretary of the Trades
Union Congress, John Monks, who saw a "big role for social
policy in the European Union
The idea of a single market,
a single currency, without social standards is something that
we cannot accept". At the other extreme, Peter Lilley MP,
former Secretary of State for Social Security, saw the Agenda
"in the context of the long-standing desire among Euro-federalists
to build a 'Social Europe'", and so to persuade people "to
transfer their loyalty from their nations to Europe". The
Institute of Directors ("IOD") were equally hostile,
arguing that European social policy revealed "a suspicion
of market forces which 'justifies' Government intervention and
regulation". (Q 123, pp. 23, 75).
28. The Government broadly welcomed the Social Policy
Agenda, but significantly their welcome was couched in the language
of the Lisbon conclusions. Baroness Jay emphasised that "the
Lisbon objective for the EU to become the most competitive and
dynamic knowledge based economy in the world is integral to the
Social Policy Agenda". Later she described it as "innovative
in that it focuses so sharply on agreements made at Lisbon".
The co-ordination and modernisation of Community social policy
was desirable "in order to meet that overall Lisbon goal,
not only to achieve competitive success, but to create more and
better jobs and to move towards greater social cohesion"
29. The Government clearly believes that the Social
Policy Agenda is consistent with the objectives and strategy defined
at Lisbon. Some of our witnesses agreed. The TUC argued that the
Agenda formed "one part, albeit an important one, of the
overall programme flowing from the adoption of the strategic goal
at Lisbon". Mr Claude Moraes, a Member of the European Parliament,
saw it as a "modernisation agenda", which "should
appeal across the board". Others were less convinced. The
Confederation of British Industry wrote:
The CBI welcomes the fact
that the key objectives of the Social Policy Agenda reflect the
headline conclusions of the Lisbon Special Council. However, some
of the specific actions detailed under these broad headlines are
neither of the type nor set at the level which would be most effective
in reaching the objectives agreed at Lisbon.
Later the CBI repeated that "the Agenda risks
moving away from the conclusions of the Lisbon Summit and extending
EU competence" (p. 45, Q 137, pp. 62, 64).
30. Graham Mather, of the European Policy Forum ("EPF")
explored the influences upon the Social Policy Agenda, including
the Lisbon summit, in detail. He argued that the document revealed
"strong tensions between the agenda of the Lisbon summit,
envisaging fast track liberalisation of European markets and a
European rapprochement with global markets on the one hand and
the European social model on the other". To support this
assertion, he cited the Report of the Employment and Social Affairs
Committee of the European Parliament.
This Report argues that "the social agenda could be improved
from the point of view of binding instruments", including
"harmonisation" of social rules, and "the adoption
of minimum standards and prescriptions which will gradually create
a high level of social rights for workers and others throughout
the Union's Member States". Mr Mather deduced that "the
'old' social model agenda is alive and well". Even Mr Monks,
despite arguing that the Agenda was consistent with the Lisbon
objectives, conceded that there was "a battle going on between
and the ones who seek to build a stronger
European competence". Mr Lilley went further, arguing that
the Agenda was in line with a long tradition of regulatory Commission
documents, "with the introduction of a few words to
pay lip-service to the concerns of the British Government"
(pp. 70, 72, QQ 133, 57).
31. Mme Odile Quintin, Director General of the Commission's
Directorate General for Employment and Social Affairs, attempted
to reconcile the Lisbon agenda of modernisation with the strengthening
of the traditional "European social model". She too
argued that the "main focus" of the Agenda was "to
implement the Lisbon Conclusions". In achieving this the
Commission had had to strike a balance, finding a position "between
the strengthening of the 'European social model' and its modernisation".
The two objectives were in fact inter-dependent: "European
social values are important to maintain and strengthen, but to
be maintained and strengthened they needed to be modernised".
Thus "modernisation" did not stand for "dismantling
what currently exists"; but "neither does strengthening
necessarily mean more legislation or more costs" (QQ 38,
32. Such analyses beg the questions of whether there
is in fact a single "European social model"; and if
there is, where the United Kingdom stands in relation to it. The
CBI was clear: "the notion of a single 'European Social Model'
does not adequately describe the patchwork of differing labour
markets and social security systems that make up the EU".
The UK, with its "relative deficiency in skills" and
its flexibility in other areas, was part of this patchwork. The
Institute of Directors disagreed: the European social model had
become "'sclerotic' and over-regulated"; in contrast,
hasn't had the 'European Social Model'it
has had the 'Enterprise' model over the last two decades which
has served it well". There was now a danger that the "enterprise"
model would be replaced by a form of "European social model".
Mr Lilley also saw "very distinct differences
the predominant pattern on the continent and that in the United
Kingdom". Underlying these comments is the belief that the
United Kingdom embodies what Mr Lilley called the "Anglo-Saxon"
approachan approach shared by Europe's major competitor,
the United States. On the other hand, there are also clear variations
between the countries on the continentthe Netherlands,
for instance, currently has a good rate of growth and very low
unemployment, combined with high levels of social protection.
Mr Monks, contrasting the UK and Germany, argued that the Netherlands
"manages to bridge the two with great gusto" (pp. 62,
78, QQ 53, 118).
33. If there is indeed a "European social model",
it can only be defined in broad terms. The TUC described the European
project as an "historic compromise": it had liberalised
markets and unleashed economic energy, but there had been a recognition
that "these new market forces can have damaging social effects".
The result was the European social model, which stood out most
clearly when compared with the American model. It was characterised
a commitment to strong welfare
states, with a determination not to let the unemployed and underprivileged
suffer real poverty; a commitment to partnership between governments,
employers and workers; a strong role for trade unions and employment
protection law, ensuring minimum standards. This contrasts with
the USA, where the employment rate may be higher but 35 million
people are without health insurance, the prison population is
enormous, there are huge inequalities
and there is an easy
'hire and fire' labour market.
Ms Catherine Barnard, of Trinity College Cambridge,
saw the constant emphasis on "modernisation" in the
Social Policy Agenda as an attempt to reconcile these two approaches,
European and American. It represented the "third way approach
of balancing some form of employment rights and rights for those
who are excluded from the labour market but with a competitive
labour market". The Agenda was balancing the "deregulatory
agenda that typified the so-called Anglo-Saxon approach ... and
the more so-called continental approach of high social benefits,
high levels of unemployment" (pp. 47-48, Q 26).
34. Several witnesses noted that "modernisation",
a key word in the Social Policy Agenda, is never defined. As a
result there were differing views on what the content and likely
effect of the Agenda actually were. Mme Quintin summed up the
view of the Commission: the Agenda was intended to establish what
the Commissioner, Mrs Diamantopoulou, had called "a balanced
between sound economic policy; between
and social policy". This balancing
of different aspects of policy would give the Community "a
flexibility to adapt to the new needs and evolution of the new
economy". Quotations from the Social Policy Agenda have been
given in Part 3 above, which attempt to show that these different
areas of policy are in fact interdependentthat social policy
should be seen as a "productive factor", and economic
growth as a means to improve the standard of living for all. Such
attempts may be seen as an extension of what the TUC called the
"historic compromise" of the European project in response
to globalisation. As Ms Barnard pointed out, Member States have
accepted the "social dimension" of the EU by virtue
of the "incorporation of the Social Chapter in the EC Treaty"
at Amsterdam. At the same time the rapid developments in the world
economy, and the EU's relatively poor performance relative to
the USA, have demonstrated the need, which was acknowledged at
Lisbon, for liberalised markets and a flexible, adaptable work-force.
As a result, the Agenda was "attempting to reconcile flexibility
and security"to achieve "flex-security".
There was a quid pro quo: "flexibility for employers
security for workers". The Community was aiming for
a highly skilled and productive work-force, trying to use social
policy (for instance education and training, active employment
policies) as "an input into growth rather than as either
a consequence of growth
a drain or burden on
growth" (QQ 38, 5, 1).
35. Underlying this balancing actwhat Mme
Quintin called policy "triangularism", and Ms Barnard
"flex-security"are several unresolved economic
arguments. This summary can do no more than give a flavour of
some of those that emerged in the course of the inquiry. The Institute
of Directors, for example, described as "not very helpful"
the use of the terms "flexibility" and "security"
as antonyms, which needed to be balanced. Instead they argued
that "job security should not be seen to be about employment
protection, it should be seen to be about creating a dynamic,
competitive and fast moving business sector that can then create
wealth and jobs". The TUC, in contrast, argued that "the
impact of economic change on workers and citizens means that fundamental
social, political, civic and trade union rights need to be strengthened".
Mr Monks, in oral evidence, highlighted the fact that the "flexibility"
of the UK's labour market had encouraged multi-national companies,
when down-sizing or restructuring, "to do it here".
He acknowledged, however, the other side of the cointhat
the same flexibility that allowed easy dismissal also encouraged
"a disproportionately good share of inward investment"
(although this was being blocked at present by the high value
of the pound). The TUC argued further that there could be "a
positive correlation between social expenditure and the level
of productivity". Mme Quintin agreed, focusing in particular
on worker consultation: "countries which have higher productivity
have a stronger tradition of involvement of workers".
While accepting this outline, the IOD put a very different gloss
on it: "as higher labour costs deter job creation and encourage
capital-intensive means of production, this can result in higher
levels of labour productivity
Capital intensive methods
are employed at the expense of job creation" (pp. 76-77,
48, Q 119, p. 46, Q 41, p. 76).
36. It will be clear from these differing views that
the Commission's theory of "triangularism"economic,
employment and social policies all pulling in the same directionis
highly controversial. Moreover, witnesses differed sharply on
how far the actual content of the Agenda would contribute to the
development of a dynamic enterprise economy in Europe. Many in
fact commented on the lack of explicit content. Mme Quintin said
it was "not really
a legislative agenda". It
set out broad objectives, but while there were many tools available
to achieve these objectives, "there should not be any preconception
of which tool to use". Mrs Jowell, Minister of State at the
DfEE, went further, describing the Agenda as a "framework
expressed at a level of generality and
abstraction at times which make it quite hard to get hold of what
is actually intended". Baroness Jay went so far as to describe
the objectives as "rather Pollyanna-ish", but was confident
that they were not "over-regulatory". Indeed, she argued
strongly for the benefits of some of the objectives, notably the
attempt to promote equality between the sexes, and in particular
to raise the level of employment among women. She cited the fact
that in the USA 50 percent of new businesses are started by women,
and that "more people in the United States are now employed
by women-owned small firms than by men-owned small firms".
There was great scope for encouraging enterprise by promoting
equality. Overall, the Government accepted the "correlation
between high levels of employment growth and low levels of regulation",
and believed that the Agenda, when one went beyond the generality,
would help promote employment. When asked to identify specific
proposals which would contribute to this end, Baroness Jay focused
on a range of objectives, including that at Paragraph 126.96.36.199:
"To develop a positive and pro-active approach to change
by promoting adequate information for both companies and employees
adapting working conditions and contractual relations to
the new economy with a view to fostering a renewed balance between
flexibility and security". However, the more deregulatory
objectives in the Agenda for the most part do not have corresponding
actions. In the case of the objective quoted by Baroness Jay,
the Government has in fact declared its opposition to one of the
principal measures by which the Commission hopes to achieve it,
the proposed Directive on informing and consulting workers, which
Mrs Jowell described as "over-prescriptive and very ineffective".
Mr Lilley, on the other hand, disagreed fundamentally with the
Government's interpretation of the Agenda: "If modernisation
is used as a code word to signify or imply a reduction in regulation
and social spending
I cannot see any significant element
in it that is moving in that direction". While there were
few specific proposals in the Agenda, he saw it as starting "a
momentum for a legal process"it was bound to lead
ultimately to "more regulation, more spending, higher taxation".
In his written evidence he listed a number of specific proposals
which in his view signified extensions of Community involvement
in social affairs (QQ 42, 93, 90, 84-85, 89, 104, 52, 63, p. 24).
37. Underlying such arguments is the belief that
European social policyand in particular legislative measures
such as the Working Time Directivehas placed a heavy burden
on business, significantly damaging the ability of European economies
to compete internationally. However, this is not necessarily the
case. Ms Barnard contended that "what we have at Community
level is far from heavy regulation". The number of directives
covering social policy, she pointed out, was "relatively
small". Some directives had, she conceded, caused difficultynotably
the "highly prescriptive" Working Time Directive. These
difficulties had been compounded by the diligence with which the
UK Government had implemented the Directive. Mr Monks went further,
arguing that the problems should be blamed not on the Directive,
but on the way it had been implemented: "We seem to make
heavy weather of it
I think the Dutch did it over a couple
days on one side of the paper, and then we have a legal document
which is phenomenally complicated
The question mark is
to the DTI rather than to the European Union" (QQ 20, 23,
38. In fact, the Community is prevented from introducing
extensive social legislation by its lack of explicit Treaty competence.
Ms Barnard pointed out that such legislation covered only "employment
matters, really quite narrowly defined". She went so far
as to argue that "social policy is actually a misnomer".
In reality, the Treaty bases for Community social policy were
"quite closely linked to employment related matters, so poverty,
social exclusion, is very much on the margins
I am not
at all clear whether the EC has power to actually enact legislation
in this field". This may help to explain and indeed justify
the Commission's "triangularism" of economic, employment
and social policywithin the limited sphere of Community
competence, social policy is in fact largely a by-product of employment
policy, and should be seen as contributing towards it. However,
it raises the broader question of whether by setting targets for
social policy in the context of employment the Community may lose
sight of other elements of social policy. Mr Lilley, for example,
noted that social protection for disabled people was one area
where "unequivocally one should be in favour". Society
should support those who "are unable to participate to the
full in the market place and need the help of those who can".
In such circumstances social policy would clearly not be a "productive
factor", and there must be a chance that the Community's
emphasis on the "productive" aspects of social policy
may confuse the real issues (QQ 20, 18, 65).
39. This raises in turn the question of how much
the measures described in the Social Policy Agenda are likely
to benefit those outside the job market, including groups such
as disabled people, who are particularly at risk of social exclusion.
In its Report on EU proposals to combat discrimination
the Committee examined the measures put forward by the Commission
under Article 13 TEC. One of these, the Directive establishing
a general framework for equal treatment in employment and occupation,
was agreed by the Council of Ministers on 17 October. In addition,
the disabled are a targeted group within the Luxembourg process.
However, as Ms Barnard asked, "what about the disabled who
are unable to work"? There is no indication within the Social
Policy Agenda of a likely date for a disability-specific Directive,
under Article 13, extending beyond the workplace. Mme Quintin
also confirmed that funding at European level for bodies representing
victims of discrimination of whatever sort was very limited. The
Community could foster "exchange of good practice",
but it was difficult to envisage substantial funding being available
even to an umbrella group such as the European Disability Forum,
still less for NGOs representing those with specific impairments.
Support for groups representing the disabled will in practice
remain the responsibility of Member States; Mr Monks noted that
within the UK the newly-established Disability Rights Commission
enjoyed wide support, not least from employers (QQ 8, 50, 122).
40. While the specific legislative proposals in the
Social Policy Agenda may be limited to areas of strict Community
competence, many matters outside that competence are discussed
within the looser framework of co-operation and co-ordination
among the Member States. This raises the possibility of "competence
creep"a gradual extension of Community involvement
in social policy, beginning at the level of policy co-ordination
and the setting of targets, moving through recommendations and
action programmes and perhaps finally to legislation. Here again
there was sharp disagreement between our witnesses. Mme Quintin
stated her view that "I do not think
any element broadens
the Community competence". In contrast, Mr Lilley saw the
Agenda as the first step towards harmonisation of social provisions
across the EU. He acknowledged that the document did not itself
"advocate such a final objective", but argued that "even
the longest journey starts with a single step. The first step
is for the EU to establish its competence in this domain".
Mr Mather of the EPF gave a more specific example: the Competition
Commissioner, Mario Monti, had suggested a change to procedural
rules within his Directorate General which might have the effect
of implying a connection between information and consultation
of workers and the clearance of merger proposals. This appeared
to be "an example of legislative creep by questionable procedural
innovation" (Q 48, pp. 23, 75).
41. The Government's approach was pragmatic: the
Agenda itself had no legal force, and thus needed no legal base.
However, legislative proposals emerging from it would be examined
rigorously: "the United Kingdom Government would certainly
resist any attempts to move beyond the Treaty competencies on
matters which are included within the document". In the course
of the inquiry the Government in fact lodged several objections
to the use of Article 13 TEC as legal base for the proposed framework
strategy on gender equality,
which is one of the key measures proposed in the Agenda for advancing
gender equality (Q 91).
42. On the other hand, Baroness Jay supported "the
wider use of the informal partnership and open co-ordination in
this area". Particularly prominent in the Agenda is the "open
method of policy co-ordination" (familiar in the context
of the employment strategy, where it dates from the Luxembourg
summit of 1997), which was extended by the Lisbon summit to cover
social policy. This method allows the Community to provide guidelines
and support for Member States, encouraging them to "co-ordinate"
their policies, while refraining from legislative intervention,
or "harmonisation". The process is administered by the
Commission, but relies on consensus among the Member States and
inter-governmental agreement of the sort reached at Lisbon (and
envisaged for future annual spring meetings of the European Council).
The United Kingdom has been strongly in favour of the extension
of this open method of policy co-ordination. Other witnesses also
welcomed its use, including the CBI, who described it as "the
most appropriate and effective method for delivering progress
towards the Lisbon objectives of economic growth and greater employment".
Witnesses generally hostile to the Social Policy Agenda also accepted
that open co-ordination had advantages: the EPF argued that it
had "much greater flexibility than traditional legislation,
greater speed and stronger opportunities to share best practice
in a true spirit of co-operation and emulation". Even the
IOD grudgingly acknowledged that many of the proposals had "the
advantage of being advisory rather than enforcing" (QQ 81,
pp. 62, 73, 78).
43. However, the "open co-ordination" method
still raises a number of questions. First is the question of whether
there is in fact, as the Government appears to believe, a clear
distinction between "soft" and "hard" law
(this, of course, relates also to the issue of competence creep
raised above). Ms Barnard gave the Committee an example of how
"soft law" had evolved into "hard":
There were originally plans
for a Directive on sexual harassment
They could not get
political agreement on that and so eventually you had a recommendation
on sexual harassment
That recommendation was a soft law
measure and a lot of people were disappointed that it did not
have more teeth but now you see sexual harassment being included
in the Directives on discrimination,
so it has gone from soft law to hard law.
In other words, where issues are too controversial
for Member States to be able to agree legislative measures (in
particular in areas of borderline Community competence), they
may nevertheless be willing to agree to "soft law" recommendations
or guidelines. These may in turn prepare the way for legislation
a few years down the line. In the case cited by Ms Barnard, the
Community's competence to combat discrimination on grounds of
sex was substantially extended by the Treaty of Amsterdam (see
Articles 13 and 141 TEC). A "soft law" recommendation
prepared the way for an extension of Community competence and
ultimately for "hard" Community legislation. One can
reasonably expect that a similar process will occur in some of
the areas discussed in the Social Policy Agenda (Q 16).
44. Even where there is no prospect of "hard"
Community legislation, the role of the Court of Justice in interpreting
"soft" law cannot be ignored. Mme Quintin was quite
clear that within the "open method of policy co-ordination"
there was "no control by the European Court of Justice".
Mrs Jowell was more cautious, pointing out in supplementary written
evidence that the ECJ's principal focus was on the implementation
of "hard law""the Treaties, Regulations,
Directives and Decisions". However, she accepted that the
Court could "take 'soft law' into account: "when considering
how a 'hard law' provision is to be interpreted, it would be open
to them to take into account a relevant recommendation which might
help to throw light on the matter". In fact, the Court's
readiness to take "soft law" into account has, in Ms
Barnard's words, led to "quasi hard law effects". The
Court, she said, had on occasion used "soft law" as
"a vehicle to construe national law where national law was
on the same subject matter". She cited the Court's decision
that while recommendations "cannot in themselves confer rights
on individuals upon which the latter may rely before national
courts", those courts were "bound to take those recommendations
into consideration". This is a complex area, and a lot depends
on how "soft" the law issimple policy co-ordination,
for instance, of the sort that Mme Quintin seemed to be envisaging,
may not have the same "quasi hard" effects as a formal
recommendation (QQ 46, p. 44, Q 16).
45. The other side of the coin is that there may
be issues on which some Member States or interested parties would
wish to see clear principles being established, but where the
"soft law" approach may be inadequate. One such issue
concerns "fundamental social rights". Paragraph 188.8.131.52
of the Agenda sets out the objective of ensuring "the development
and respect of fundamental social rights". The Agenda looks
to the adoption of the proposed Charter of Fundamental Rights
to "provide a new impulse to this area". As an objective,
this was welcomed warmly by the TUC, who argued that "fundamental
social, political, civic and trade union rights need to be strengthened".
However, it is notable that the specific actions proposed in the
Agenda fall far short of this ambitious objective, and in particular
it is unclear what role, if any, the Court will have. The CBI,
on the other hand, criticised the "ambiguous" reference
to the Charter"the CBI does not believe that the future
role of the Charter is to act as a social action programme, putting
political pressure on Council members to accept an extension of
EU level action in areas which they have previously argued should
be left to national law and practice". This is a controversial
area, and the UK Government has been particularly vehement in
insisting that the Charter should not be legally binding.
It may be that the Social Policy Agenda will only add to the controversy
(pp. 48, 65).
46. The "open method of co-ordination"
relies upon inter-governmental agreements, particularly those
reached at meetings of the European Council. Governments will
compare best practice, set benchmarks and targets, and timetables
to meet these targets. At present there is a broad centre-left
consensus among the governments of the EU, and thus general agreement
about many areas of social policy. However, there is clearly a
danger that the consensus may break down in the future. This begs
the question of how such targets will be enforced, and indeed
whether they should be enforced. As Ms Barnard pointed out, targets
represent a "carrot", but there is no "stick"
to back them up. The whole process relies on the fact that all
Member States "are willing to play by the rules of the game".
When asked what confidence one could have that other Member States
would meet the benchmarks, Baroness Jay in effect fell back on
good will, the "positive virtues of the comparative experience
of the benchmarking". In practice, however, things may be
differentsome witnesses suggested that "peer review"
might in effect turn into moral blackmail. The EPF suggested that
"the peer review procedure may turn into an 'arm twisting'
system in which lightly regulated Member States are pressured
to bring their regulatory burdens up to the levels of less competitive
economies". The Employers' Forum on Statute and Practice
("EFSP") also argued that "benchmarking has developed
into a process which is sometimes akin to 'naming and shaming'".
Mr Lilley went so far as to describe open policy co-ordination
as "harmonisation by another name" (QQ 16, 103, pp.
73, 70, 25).
47. In this context, the Committee also asked about
the effect of the Social Policy Agenda upon applicant states.
Mme Quintin confirmed that there had been "a series of meetings
about employment and social policy" with applicants. Clearly
legislative proposals would form part of the acquistheir
adoption would be a condition of accession. However, Mme Quintin
said further that the applicants had been "extremely keen
on embarking on the employment process"indeed, they
had adopted "national action plans related to our strategy".
It thus appears that even in the absence of the means to enforce
policy harmonisation formally through the acquis communautaire,
the applicant states are likely to strive to keep in step with
developments within the EU (Q 44).
48. Underlying the open method of policy co-ordination
is the belief that states can learn from one another by comparing
practices across a range of issues. No-one challenged this belief.
Baroness Jay accepted that while the UK had much to be proud of
it was nevertheless in some areas (for example, equality) "lagging
behind" and could learn from its neighbours. Mr Monks also
argued that while we had "things that we can pat ourselves
on the back for", we should nevertheless look "with
a degree of humility
at the experiences of other countries".
The Netherlands was in many respects the "modern exemplar"
on the European mainland, but the EU as a whole could also benefit
from absorbing the lessons of America's success"its
technology and leadership
its vitality and energy".
On the other hand, Mr Lilley pointed out that governments had
always engaged in informal comparisonas Secretary of State
for Social Security he had encouraged his officials to absorb
lessons from other countries, including New Zealand and Sweden,
in developing long-term strategy. But he argued that for such
comparison to work countries had to be free to pursue different
policies: "there is a lot to be learned from other countries,
but only from other countries that have the freedom to do different
things from you. If you are in a system where you all do the same
thing, you do not get that advantage". Europe, in contrast,
had "a tendency
to enforce unnecessary similarity"
(QQ 103, 118, 72, 74).
49. The final point to be made about the open method
of policy co-ordination is a concern over democratic accountability
and the role of elected parliaments. The EU's employment strategy
(since 1997) and the broader strategy agreed at Lisbon rely on
inter-governmental agreements. As a result the European Parliament
is, in Ms Barnard's words, "rather sidelined". The Resolution
adopted by the Parliament on 25 October appears to confirm this
perception, arguing in favour of Community legislation, which
"maintains democratic parliamentary influence and judicial
controls over the Union's decisions". Mme Quintin acknowledged
that whereas according to Article 251 TEC the EP has a right of
co-decision for most legislative proposals it has no such right
in the context of open policy co-ordination. Its role appears
to depend largely on the good will of the Commission and Council:
"In the context of the open method of co-ordination we have
consulted the European Parliament
We pay strong attention
to the views of the European Parliament". However, it is
unclear how this will work in practice. Mr Lilley agreed that
it was "very difficult" to hold governments to account
for decisions reached within the Council. Drawing on his own experience,
he continued, "It is fun negotiating
through the night
and so on and not having to worry about what your constituents
think, because there is nothing much they can do about it".
Whether or not one advocates more Community legislation, the lack
of democratic accountability in the process envisaged in the Social
Policy Agenda inevitably concerns a Committee of a national parliament.
If the role envisaged for the European Parliament is small, that
for national parliaments is likely to be still smaller. The Agenda
gives on page 14 a list of "actors" whose participation
would lead to "an improved form of governance". They
include the Commission, Council and European Parliament, national
governments and local authorities, the social partners and NGOs.
No mention is made of national parliaments. Baroness Jay, however,
argued that this was no more than an unfortunate turn of phrase"I
assume that 'national governments' must mean 'national parliaments'"
(QQ 35, 49, 78, 99).
50. Although the open method of co-ordination raised
this wide range of concerns, witnesses for the most part agreed
that it had the merit of allowing a degree of flexibility to Member
States. It was thus in keeping with the principle of subsidiarity.
Ms Barnard, for instance, pointed out that in the absence of clear
Community competence in many of these areas, the "soft law"
approach does "allow at least some room for the national
systems to try to work out what is the best arrangement in their
own country, bearing in mind the vastly different heritage of
traditions". The EFSP, in contrast, argued that the
complexity of the operations of labour markets provided "compelling
reasons" why any action "should not be undertaken at
European level" (Q 27, p. 66).
51. One aspect of subsidiarity at European level
is the role given to the social partners, management and labour.
Not only do they participate fully in the implementation of measures
concerning the workplace, but they are empowered by Article 139
TEC (deriving from the Social Chapter, and incorporated in the
EC Treaty at Amsterdam) to negotiate European level agreements
which may be implemented by Council decisionusually a directive.
This procedure is justified by reference to subsidiarityin
Ms Barnard's words, "giving a role for the social partners
is seen very much as an aspect of subsidiarity, because those
who are deciding matters are closer to those affected". Mme
Quintin argued that it was "positive" for the social
partners to be "able to come to a balance between them of
mutual interests". It was "a good implementation of
the principle of subsidiarity that when they can come to such
deals, it is better that the public authorities just let them
do so". It is clear that some of the agreements that have
been reached by means of this procedure have respected the principle
of subsidiarity in practice as well as in theory. Ms Barnard cited
the Parental Leave Directive of 1996, which simply set down "two
key rights"the right to time off for parents, and
the right to time off on grounds of force majeure. However,
all of the detailed implementation had been left "to the
Member States or to the social partners at national and sub national
level to determine". Despite this, the CBI expressed some
concern that subsidiarity might be undermined by EU level agreements.
While acknowledging that the social partners at this level could
"add value by promoting the exchange of information and best
practice", the CBI felt that the social partners at "national
or local level" were "best placed to determine objectives
and areas suitable for negotiations/dialogue" (QQ 9, 43,
11-12, p. 64).
52. This procedure is relatively familiar in many
Member Statesas Ms Barnard pointed out, in Belgium it is
"quite standard that some form of administrative act just
extends the content of the collective agreement". However,
in the United Kingdom it is both little known and controversialindeed,
in the EPF's words, it is "dramatically at variance"
with the UK's system. Nevertheless, the TUC were whole-heartedly
We have available to us a
dynamic system that we can use to introduce better regulation
in a much more flexible manner. It is much more flexible for the
social partners to negotiate proposals that can fit the realities
of the shop and office floor. It is better regulation to establish
principles at the European level that can then be adapted to the
national, sectoral and the local plant or workplace level. This
is preferable to going down the legislative pathway alone.
The CBI, on the other hand, which like the TUC participates
in the work of the social partners at European level, was more
reserved. It argued that it was "important that employers
and representatives of the workforce are fully consulted in the
development of social policy"; in particular it was desirable
to draw on the social partners' "detailed knowledge of conditions
and concerns within actual companies and workplaces" when
preparing relevant EU legislation. However, such negotiation should
"follow on from rather than pre-empt a mandate from the Council
of Ministers" (Q 15, pp. 47, 63).
53. Detailed concerns about the Article 139 procedure
were raised by a number of witnesses. The first was democratic
accountability. There is no input into agreements reached by the
social partners from either the Council or the directly elected
European Parliament. In Ms Barnard's words, "once the agreement
is negotiated it is then given to the Commission, the Commission
makes a proposal and the Council adopts that proposal or rejects
that proposal. To date the Council has only adopted the proposal.
There is no role whatsoever for the European Parliament in that
process". There is no possibility for the agreement to be
revised: as the EFSP commented, the Commission, Parliament and
Council "can accept or reject any proposal
however, amend it". The result, arguably, is what Ms Barnard
called a "lack of democratic accountability and
of transparency". National parliaments have an input only
when the Directive comes to be transposed into national law; the
EFSP described them as a "rubber stamp". In contrast
Mr Monks of the TUC, while acknowledging that the procedure "tends
to offend the way Parliaments think", claimed that it was
justified by the flexibility of the agreements resulting from
it: "the test should be pragmatic". Mme Quintin was
also pragmatic, claiming that in practice the European Parliament
could make its views known: "We have always managed
in a practical way, and Parliament has started to express their
views about the Social Partners agreement". An informal exchange
of views, however, falls far short of giving the European Parliament
a formal role in shaping the legislation resulting from such agreements.
Baroness Jay's response to these points shed little light:
I would say, insofar as I
have practical experience of being involved in this, that since
the Government's perspective is that because you have the social
partners also, although not under that particular heading, including
representatives from the European Parliament or other organisations
with them, or democratic mandate in some of the voluntary organisations,
you do have that connection back into the policy base that we
would, perhaps, expect more domestically.
Lady Jay did, on the other hand, point out that the
Article 139 process could only occur in response to a consultation
initiated by the Commission; Mrs Jowell pointed out also that
the final decision rested with the Council. However, neither Commission
nor Council have any control over the final content of social
partner agreements (QQ 14-15, p. 67, QQ 125, 49, 105).
54. Related to the issue of democratic accountability
is the question of how far the "social partners" at
the EU level are in fact representative of the interests of employers
and workers. The organisations that have negotiated agreements
hitherto have been UNICE, the employers' association, CEEP, the
public sector employers' association, and ETUC, the European TUC.
As Baroness Jay asked, "who do you
ask to represent
people who do not have a formal representative organisation acting
on their behalf?" She noted that the small high-tech businesses
that feature so prominently in the Lisbon conclusions "do
not have the traditional representative bodies which would be
given a place at the table". Nor were Governments, as employers,
included in the process. Similarly, Ms Barnard pointed out that
consumers play no formal role in the social dialogue. The EFSP
were convinced that the social partners were "not representative".
In fact the model of the European social partners dates back to
the European Coal and Steel Community, formed in 1951. This was
formed around a few major industries, which had heavily unionised
workforces. The relevance of this model to the contemporary world,
in which most employees work for small and commonly unaffiliated
businesses, and union membership is low (perhaps as low as ten
percent in France), is open to question. In fact, as both Ms Barnard
and Mme Quintin noted, the representativity of the social partners,
and thus the legitimacy of the Parental Leave Directive, was unsuccessfully
challenged before the Court of First Instance by UEAPME, a group
representing small and medium sized enterprises.
UEAPME is now itself involved in the work of the social partners.
Nevertheless, Mme Quintin said that the Commission's forthcoming
white paper on European governance would look at the role of "civic
society", including the social partners, NGOs and other bodies
(QQ 111, 7, p. 67, Q 45).
55. The EFSP, who criticised the system of the social
partners in considerable detail, also suggested a range of proposals
for its improvement. They argued that any improvements to the
representativity of the social partners could only be "marginal".
Instead of turning the social dialogue into "a quasi-legislature
prescribing particular approaches, it should focus on what the
social partners could do bestto establish and promote ideas
of best practice to enhance competitiveness". Contacts between
bodies involved in the dialogue, such as the CBI, and employers
or other interested parties, should be improved. The social partners
and their constituent organisations should be required to "make
an impact assessment of their proposals, country by country, at
each stage in the negotiations". Those who would actually
have to implement any agreements should be enabled to "make
practically informed submissions throughout": this would
necessitate better publicity in the press and the internet, with
interested parties being able to post responses on a "generally
accessible noticeboard" (pp. 68-69).
23 Report on the Commission communication to the Council,
European Parliament, the Economic and Social Committee and the
Committee of the Regions on the social policy agenda, 16 October
2000. The Rapporteur was Mrs Anne Van Lancker. Back
towards the end of the Committee's inquiry exposed the tensions
underlying EU social policy. On 9 November the French Presidency
published their own paper on the Social Policy Agenda (document
12619/00), which was heavily criticised by the Commission and
other Member States for undermining the Lisbon conclusions. The
Commissioner for Employment and Social Affairs, Mrs Diamantopoulou,
is quoted as calling it "traditional and old-fashioned".
See "Paris under attack on social plans" (Financial
Times, 21 November) and "EU rejects France's 'backward'
agenda" (Times, 22 November). Back
from the Commission to the Council, the European Parliament, the
Economic and Social Committee and the Committee of the Regions
"Towards a Community framework strategy on gender equality
(2001-2005)" and Proposal for a Council Decision on the Programme
relating to the Community framework strategy on gender equality
(2001-2005), 11 July 2000 (document 8638/00). Back
the Proposed Directive amending Council Directive 76/207/EEC on
the implementation of the principle of equal treatment for men
and women as regards access to employment, vocational training
and promotion, and working conditions, 14 July 2000 (document
C-322/88 Grimaldi v Fonds des maladies professionelles 
ECR 4407. Back
a discussion of the potential legal effects of a non-binding Charter
of Fundamental Rights see the Committee's Report on the EU
Charter of Fundamental Rights (8th Report, Session 1999-2000,
HL Paper 67), paragraphs 122-127. Back
T-135/96 UEAPME v Council  ECR II-2335. However,
as stated above (paragraph 9), this decision was without prejudice
to future decisions on representativity. Back